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JPMorgan earnings soar amid 'exceptionally strong' consumer balance sheets, credit release

JPMorgan Chase (JPM) kicked off the second quarter earnings season for bulge-bracket backs on Tuesday, reporting better-than-expected earnings results that were bolstered by a strong economy and the release of credit reserves.

Here are the key figures versus estimates, according to Bloomberg:

  • Adjusted earnings per share (EPS): $3.78 vs. $3.15 estimate

  • Excluding credit reserve releases: $3.03 per share

  • Revenue: $31.4 billion vs. $30.06 billion estimate

During the quarter, the largest U.S. bank by assets earned $11.9 billion in net income, up $7.3 billion from a year ago, driven by credit reserve releases of $3 billion compared to credit reserve builds of $8.9 billion a year ago.

While not central to JPMorgan's operations or even recurring, CEO Jamie Dimon said the development reflected the underlying strength of the economy, and the health of consumers.

He noted that the consumer balance sheet "remains exceptionally strong," while the economic outlook "continues to improve." The CEO pointed out that net charge-offs were down 53%, which "were better than expected, reflecting the increasingly healthy condition of our customers and clients.” Dimon added that debit and credit card spending was up 45% from a year ago, and up 22% from the second quarter of 2019 pre-pandemic levels.

Breaking the results down further, total markets revenue declined 30% to $6.8 billion in the quarter, with fixed income revenue falling 44%, but were offset by equity markets revenue climbing 13%. In recent weeks, Dimon suggested a "more normal" quarter for trading with revenue from trading fixed income and equities "a little bit north of $6 billion."

Banking revenue rose 1% to $5.1 billion, with investment banking revenue also up 1% at $3.4 billion in the quarter on higher fees.

Shares of JPMorgan were trading down 1.52% near $155.60.

Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.

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